December 11, 2011, 9:27 PM EST
Article from Bloomberg Business Week
By Nicholas Larkin and Joe Richter
Dec. 9 (Bloomberg) -- Gold futures rose for the second time in three days as the dollar’s decline boosted demand for the precious metal as an alternative asset.
Leaders of the 17 euro nations reached an accord to tighten budget controls and added 200 billion euros ($267 billion) to a rescue. The euro gained against the dollar, which fell against a basket of major currencies.
“The weaker dollar is working to push gold higher,” Sterling Smith, an analyst at Country Hedging in St. Paul, Minnesota, said in a telephone interview.
Gold futures for February delivery rose 0.2 percent to settle at $1,716.80 an ounce at 1:55 p.m. on the Comex in New York, paring this week’s decline to 2 percent. The metal has climbed 21 percent in 2011, heading for an 11th straight annual gain, on demand for a haven amid escalating debt in Europe and the U.S.
Speculation that the European plan may meet resistance from some nations increased gold’s appeal as a store of value, Smith said.
U.K. Prime Minister David Cameron said there was “fundamental disagreement” in European Union talks in Brussels and rejected signing a fiscal pact. Finland threatened to withdraw from the permanent bailout fund if decisions shift to a “qualified majority” from unanimity.
“A lot of questions remain with the European situation, and it’s not clear how people in these countries will react to the agreement when leaders take it home,” Smith said.
Silver futures for March delivery rose 2.3 percent to $32.253 an ounce on the Comex, snapping a two-day slump. The metal fell 1.3 percent this week.
--With assistance from Simon Kennedy in Brussels, Kati Pohjanpalo in Helsinki, Gonzalo Vina in London and Tony Czuczka in Berlin. Editors: Steve Stroth, Patrick McKiernan
To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Joe Richter in New York at jrichter1@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
Article from Bloomberg Business Week
